Economic empowerment

About

For the purpose of this report, we have grouped Micro Small Medium Enterprises (MSME) into two categories namely informal businesses and formal businesses. Along with our partners, we intend to provide products and services to both informal and formal businesses. According to the African Development Bank, the informal sector accounts for 55% of GDP and 80% of the labour force in Sub-Saharan Africa. While there is no definitive figure to describe the size of the MSMEs market in Africa it is safe to conclude that this sector represents quite a sizable and growing portion of the African economies. Our product innovation would focus on providing MSMEs in Africa with a one-stop digital platform where entrepreneurs could manage their business processes, develop skills, obtain financing and services that would help them to grow and professionalise their businesses. 1. Problem Statement MSMEs are faced with many structural handicaps that limit their ability to grow, these includes: • Low job security • Child labour • Low wages • Presence of criminal elements • High poverty rates • Limited ability to access higher education and healthcare • Inability to gain access to bank accounts • Money saved under the mattress is prone to theft • Limited ability to save money • Inability to access overdraft facilities, credit cards and loans • A largely unorganised sector where daily, weekly or monthly profits are immediately reinvested to purchase small quantities • Lack of modern business tools and software • Lack of basic business management skills, knowledge and professionalisation 2. Solutions Therein lies the opportunity to build a one-stop platform for MSMEs. The objective is to bring companies in the informal sector into the formal economy, assist entrepreneurs in growing their businesses, reduce poverty and contribute in the growth of the economy. To do so we want to provide entrepreneurs with the software, skills, knowledge and enabling services to achieve these objectives. 1.1. Software Calitech Solutions would provide purposely built solutions for MSMEs in areas like Stock management, Accounting, Invoicing, Taxation, Payroll, Marketing, Sales, Mini e-Commerce Portal and Point of Sales. The solutions would be intuitive and easy to use, the users would be guided through their processes from A to Z. All systems would integrate seamlessly thus pre-empting siloed mentality, eliminating repetitive and manual processes, and reports at a click and eliminating duplicate data. Some of the benefits of adopting our solutions would include: • Allow the entrepreneur to focus on what's most important and sell instead of admin work • Better clarity on actual cash flow versus cash in the till • Ability to see profit per day, week, month or year • Ability to sell and market online in just a few clicks • With a mini cash flow statement and balance sheet for borrowing facilities • Calculate and pay taxes within a few clicks 1.2. Formalisation Services The idea is to provide a one-stop-shop for small and micro-businesses to grow and formalise their business activities whether in banking or registering their businesses with the government. As such we would provide the following digital services: • Provide a portal on our platform where entrepreneurs in the informal sector could register their companies online with API integration with the government for electronic submission. In the case where integration with government software is not possible there is also the possibility for a workflow option via email to the government company registration office. • Provide a portal where unbanked businesses could apply for a bank account, overdrafts and loans on our platform via API integration with a partner bank. This solution could include a credit rating functionality where businesses could be pre-approved for a loan in minutes. • Reduced criminality linked to money laundering, terrorism and drug trafficking To make this work we would need to partner with governments and financial institutions. The marketing messaging could include access to formal banking services by signing up to our platform. The benefits of this service would include: • By using our mini POS and Accounting solutions businesses could prove that they are viable and able to access formal banking services • Formalising the business with the government would allow MSMEs to do business with larger organisations and grow their addressable market • Governments are incentivised as this collaboration would help to reduce the amount informal businesses and increase tax revenues • Banks would stand to benefit as businesses grow and increase the usage of banking services 1.3. Skills Development Providing MSMEs with a technology solution would not suffice, we want to equip our customers with the necessary knowledge and skills to grow their businesses and increase revenues. Some initiatives could include: • Partnering with learning institutions to provide courses designed specifically for MSMEs • Designing joint courses with a training provider around using the system but also integrating better management skills in areas like accounting, payroll, recruitment, digital marketing, sales, customer service, inventory management, money management, point of sale and merchandising • Partner with NGOs that would finance the project and/or provide courses and business support services. The benefits of this service would include: • Reduce dependency on foreign aid and social programs • Improve entrepreneurship skills • Move companies from small to medium enterprises and beyond • Change mindsets and reduction in poverty 1.4. Partnering Initiatives In addition to partnering with learning platform providers, we could also: • Partner with other software solutions providers and other companies to provide innovative adapted services for small and micro-businesses like small business loans, logistic services, online payment facilities, and others. • Partner with banks to develop a credit rating system for SMEs that help our customers to become creditworthy. • Partner with insurance companies to provide affordable healthcare insurance and other policies • Partner with NGOs to provide training that would otherwise be too costly for us to provide 3. Data Services Metadata collected on the platform could be used to attract services and products that are in demand by SMEs. The data could also be used by our customers, partners and advertisers on the platforms for sales and marketing purposes. However special attention must be given to data privacy considerations in ensuring that the customer’s personal data is protected. 4. Chose of the technology platform While a definitive technology has not been agreed the suggested technology is the Microsoft Dynamics 365 platform. This is a software development technology which permits rapid software development through configuration instead of coding. The technology was chosen for several reasons, including: • Dynamics 365 is perfectly adapted to Africa because of its scalability, agility and ability to grow with the company at paste and budget. It's available on-premise but also in the cloud as such accessible from a smartphone, tablet or computer. • Dynamics 365 helps to solve many fundamental business pain points as businesses grow including siloed mentality, duplicate data, manual processes, security concerns, and insufficient and inefficient reporting. • It's a world-class proven software development platform developed by Microsoft with an annual R&D budget of USD 1.3 billion in 2021. • As the company move from a small organisation to a medium and large they could easily transition to one of Microsoft's pre-built solutions that are designed for medium and large organisations with reduced complexity and cost Our software would be built with western digital transformation best practices in mind thus indoctrinating our customers at an early stage in their development and avoiding making the same mistakes that were made in mature economies fifteen years prior in their growth. This will represent a significant competitive edge for our customers and that has the potential to accelerate the growth of the MSMEs. 5. Benefits The benefits of this program are threefold both for SMEs but also for governments. Benefits for small and micro-businesses: • Increased revenues and business growth • Move companies from the informal to the formal economy • Access to formal banking services like bank accounts, overdrafts, credit cards and loans • Improved livelihoods and facilitate the transition to the middle class • Improved access to basic services like healthcare and education Benefits for governments: • Increased revenues from taxation • Better collection of economic data for policymaking • Improved economic indicators • Reduced criminality linked to money laundering, terrorism and drug trafficking • Reduce dependency on foreign aid and social programs Benefits for partners: • Increased revenue for our business partners • Reduction in poverty and social issues for our NGO partners • Access to a wider pool of customers at scale In short, the idea is to create a long-lasting mutually beneficial partnership that would help our customers and partners grow from small to large organisations while having a deep social and economic impact on the continent.